10 May

Tether, the largest stablecoin globally, strongly criticized Deutsche Bank's recent statement, which cast doubts on the sustainability of stablecoins and questioned Tether's solvency.

Deutsche Bank's research, released on Tuesday, examined 334 currency pegs dating back to 1800 and found that only 14% endured. The research suggested that stablecoins are susceptible to "turbulence and de-pegging events," citing concerns about their transparency and vulnerability to speculative sentiment.

The report highlighted the collapse of TerraUSD as an example, which had a ripple effect across the crypto market, emphasizing the volatility and risks associated with stablecoins. It called for greater transparency and regulation in the cryptocurrency market.

Deutsche Bank specifically targeted Tether, a leading stablecoin, raising doubts about its solvency and its industry standards for crypto derivatives. It warned of potential losses and repercussions for the entire crypto system in the event of a "Tether peso moment."

The report also emphasized the challenges of constructing stable currency pegs, despite the novelty of cryptocurrencies, predicting increased instability in the future.

Deutsche Bank conducted a survey of over 3,350 consumers in March, spanning several countries, which revealed skepticism about stablecoins' future. Only 18% of respondents expected stablecoins to thrive, while 42% anticipated their decline.

Deutsche Bank's Stablecoin Warning Is Slammed by Tether

The research team expressed concern about Tether, highlighting its dominant position in the stablecoin market and its significant role in the crypto derivatives market. They noted a 30% de-peg rate among some stablecoins, suggesting that many defunct stablecoins are challenging to track.

In response to Deutsche Bank's assertions about stablecoins, Tether criticized the research for lacking clarity and substantial evidence. Tether argued that the research relied on vague assertions rather than rigorous analysis and failed to provide concrete data to support its claims.

May 2024, Cryptoniteuae

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